China intends to "fight to the end" in the trade war with the United States. What does this mean?

China and the United States have mutually imposed duties on goods — American rates reach 30%, while Chinese rates amount to 10%. On October 11, American leader Donald Trump announced the introduction of additional 100 percent duties from November 1 and restrictions on the export of key software. These measures were a reaction to Chinese restrictions on exports of rare earth metals and magnets, which are used in the high-tech and defense industries. At the same time, China expressed its readiness to confront the United States to the end as part of the ongoing trade war. What the collision of the world's largest economies can lead to is in the Izvestia article.

The next round of war

• In early October, US President Donald Trump announced the introduction of new trade restrictions against China. Starting on November 1, the US administration is going to impose 100% duties on Chinese goods and impose restrictions on the export of important software. Formally, the decision is explained by the "response" to Beijing's measures, which announced increased control over the supply of rare earth metals, a key resource for high—tech industries. China, where about 70% of the world's production of these elements is concentrated, intends to require a license even for the export of products where at least a small proportion of such metals are used. Trump's statements instantly reverberated through financial markets, causing chaos in the crypto sector.

• Beijing has effectively just closed the loopholes that allowed American companies to circumvent previous restrictions through third countries. This decision destroyed the unspoken "truce" that allowed both powers to maintain the appearance of compromise. The White House did not seem to expect China to completely shut down its sanctions circumvention schemes, and in response, Trump defiantly increased his rhetoric, accusing Beijing of "unprecedented aggression."

• Later, the American leader tried to soften his own words, assuring that "everything will be fine" and that he did not want to harm China. Despite attempts to smooth out the corners, the markets have already experienced a severe shock: the cryptocurrency collapsed, investors suffered losses. Trump will probably look for a way to stabilize the situation, because there are many major players in the crypto market in his entourage and among his sponsors.

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• Against this background, China is strengthening cooperation with India, guaranteeing it supplies of rare earths provided that they do not end up in the United States. Such a move puts India in a delicate position between the two economic giants, and Washington in an even more vulnerable position amid the trade crisis.

The new format and the reasons for the confrontation

• The trade war between the US and China has now shifted to the maritime sphere. We are talking about symmetrical measures, under which both powers have introduced mutual tariffs for maritime transportation since October 14. Trump announced a similar decision back in early 2025. This mirror policy turns maritime logistics into a new battlefield and has the potential to disrupt familiar supply chains. Washington's decision, initiated by the Trump administration, is aimed at reducing Chinese influence in the shipping industry and stimulating its own shipbuilding.

• The parties are negotiating hard, realizing mutual dependence: China controls critical resources for global industry, while the United States remains dominant in the aviation and high-tech sectors. Despite the tension, a meeting between Trump and Chinese President Xi Jinping at the APEC summit in South Korea, which will be held from October 31 to November 1, is not excluded. The current rhetoric is only an attempt to strengthen Washington's negotiating position before a new round of trade agreements.

Impact on global trade

• The United States itself is currently experiencing the greatest difficulties, especially in industries related to semiconductors, electronics, and technology, from telephones to space and ballistic systems. China as a whole remains quite autonomous, having its own production of rare earth metals necessary for industry, and even with a decrease in US purchases, it is able to meet domestic needs.

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• Other countries with rare earth resources may face growing interest from American companies, which affects the regions of Central Asia, India, Africa and Latin America. As a result, the trade conflict will have an impact on global supply chains, although this creates only moderate difficulties for China and does not lead to serious economic destabilization.

• The probability of a global recession before the end of 2025 has increased to 60%. At the same time, global GDP may slow down to 2% per year, although this scenario does not look basic. For such a fall, the combined growth of the economies of the United States, China and the European Union should decrease by almost 3%, which is unlikely even taking into account the spread of the effect to other countries.

• Adaptation processes take time: similar phenomena were observed during the growing sanctions pressure on Russia, which created only temporary difficulties for foreign trade. Although China and the United States account for about a quarter of global imports, the share of Chinese goods entering the American market does not exceed 2% of global exchange and is already inferior in scale to Mexico's exports to the United States, so it is premature to talk about the onset of a global recession.

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• Third countries are faced with a choice between cooperation with the United States or China. Globally, this slows down economic growth and international trade. However, if the conflict is resolved within a few months, the negative effects may be partially offset and will not have a lasting impact.

Duration of the war

• The prospect of a prolonged trade war between the United States and China is extremely low, as historically the acute phases of such conflicts last only a few months. The main goal of the United States is to force China to come to an agreement that is unfavorable for the republic, as it was between the United States and the EU.

• At the same time, although there is a fundamental confrontation between China and the United States, de-escalation will be more beneficial from the point of view of pragmatic economic interests. China cannot easily redirect all export flows to the domestic market and neighboring countries. In turn, the American side needs Chinese raw materials.

What does this mean?

• The trade war disrupts the usual logistics routes, while reducing the pace of global growth. However, the probability of a deep recession remains minimal. High-tech industries, in particular, semiconductors and electronics, are experiencing the greatest difficulties. However, if the conflict is resolved within a few months by concluding a deal, the negative effects may be partially offset. In this case, the global economy is able to recover quickly.

When writing the material, Izvestia talked and took into account the opinions of:

• Vladimir Demidov, an economist, analyst, and international expert on the resources and energy market;
• Andrey Barkhota, an economist and financial market expert;
• analyst, journalist, author of the Crimson Digest channel Ivan Danilov;
• Dmitry Kuznetsov, a researcher at the E.T. Gaidar IEP.